impact of globalization on the human resource management

8/8/2019 IMPACT OF GLOBALIZATION ON THE HUMAN RESOURCE MANAGEMENT

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IMPACT OF GLOBALIZATION ON THE HUMAN RESOURCE

MANAGEMENT FUNCTION IN DEVELOPING COUNTRIES: A CASE STUDY

OF KENYA PUBLIC CORPORATIONS

Hazel Gachoka Gachunga1

AbstractGlobalization has a major impact on the management of human resources in developing

countries including Kenya. It has led to homogenization and convergence in organization

strategies, structures and processes as well as in consumer choice. With accelerating

globalization, organizations have had to change and new trends have set in even in the

management of human resources. Globalization has led to changes in organization

design and organization structures are leaner thus improving efficiency but having a

negative impact on staff numbers which have had to be reduced. This means employees

have been retrenched in many sectors like telecommunications, the Kenya Railways and

the Kenya public service sectors in order for those organizations to gain competitive

advantage. Reward management systems have changed and even the human resource

planning strategy is to have a leaner staff in the core areas and to hire part time workers

in a bid to reduce costs and to enable the business to run profitably and efficiently. The

non-core jobs have been outsourced which has led to an increase in independent

contractors to service industries. However, the homogeneity that results from

globalization has had a major effect in developing countries because of brain drain.

Globalization can therefore be said to have had a phenomenal impact on a developing

economy like Kenya that is both positive and negative as explored in the paper.

INTRODUCTION

Globalization was defined by Giddens (1990) as the intensification of worldwide

social relations which link distant localities in such a way that local happenings areshaped by events occurring miles away and vice versa. This definition embodies some

interrelated ideas, of accelerating interdependence (Ohmae, 1989), of action at adistance (Giddens, 1990) and of timespace compression (Harvey, 1989).Accelerating interdependence is understood to be the growing intensity of international

enmeshment among national economies and societies, such that developments in one

country impacts directly on another country. Time space compression refers to the

manner in which globalization appears to shrink geographical distance and time. In aworld of near instantaneous communication, distance and time no longer seem to be

major constraints on patterns of human organization and interaction (Held, McGraw,

Goldbat and Perraton, 1999). Globalization is leading to homogenization andconvergence in organizations strategies, structures and processes and in consumer

choice, along with a new global division of labor that widens the income gap between

the haves and have nots both within and between societies.

Todays world is organized by accelerating globalization, which is strengthening

the dominance of a world capitalist economic system , supplanting the primacy of thenation state with transnational corporations and organizations, and eroding local cultures

and traditions through a global culture (Kellner, 1989).

1 Hazel Gachoka Gachunga is a lecturer in human resource management in the School of Human Resource

Development at Jomo Kenyatta University of Agriculture and Technology.

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The emergent global economy and culture can be described as a network societywhich is grounded in new communications and information technology (Castell, 1996,

1997, 1998). Some view globalization as the continuation of modernization and a force of

progress, wealth, freedom, democracy and happiness. Others view it as another form ofimposition. Its critiques view globalization as harmful and perceive it as a force that

brings about increased domination and control by wealthier and overdeveloped nationsover the poor and underdeveloped countries. They feel that it widens the gap between thehaves and have nots (Castell, 1996).

From the social theory perspective, globalization involves the flows of

commodities, capital, technology, ideas, forms of culture and people across nationalboundaries via a global networked society (Castells, 1996, 1997, 1998). The

transmutations of technology and capital, work together to create a new globalized and

interconnected world. (Castell, 1998)

A technological revolution involving the creation of computerized network of

communication, transportation and exchange is the presupposition of a globalizedeconomy, along with the extension of a world capitalist market system that is absorbingevermore areas of the world and spheres of production , exchange and consumption. The

technological revolution presupposes global computerized networks and the free

movement of goods, information and people across national boundaries. Hence the

internet and global computer networks make globalization possible, by producing atechnological infrastructure for the global economy. Globalization has an effect on

employment patterns worldwide. It has contributed to a great deal of outsourcing which is

one of the greatest organizational and industry structure shifts that changes the waybusiness operates (Drucker, 1998). Globalization is also seen as changing organizational

structures where expenses can move up or down as the business climate dictates (Garr,

2001). For employees the trend toward outsourcing has been thought to result in a loss offixed employment opportunities as a consequence of firms seeking to use cheap labor

from countries like China, Mexico and even Africa. The globalized economies have also

had their effect on reward systems, migration, and on job security and each of these arediscussed in the below.

Globalization and Outsourcing

As a result of globalization, the employed workforce is made up of part time,temporary, freelance, or independent contractors and is growing (Geiger, 1999; Neikirk,

2002). According to Clot (2004) the basic idea about outsourcing is that if a firm does not

specialize in a certain function which it does not consider core, it will outsource the workand therefore be able to offer better cost and quality.

Global outsourcing has altered the work in companies. Initially outsourcing wasonly done for the peripheral services such as janitorial services, but now outsourcing has

been extended even to the core functions such as final product assembly, customer

service, financial services and technological services (Clot, 2004).

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Specifically in Kenya, Business Process Outsourcing (BPO) includes call centers,animation, software development, knowledge processing, data processing and

transcripting (Wahome, 2008). A case in point is the Telkom Kenya which recently

retrenched more than ten thousand employees. A number of those employees who hadunique specialized skills in telecommunications, but who could not be retained under the

new management as full time employees were asked to form companies from which thecorporation could outsource the services it needed (Telkom Kenya Records, 2006).Safaricom, a mobile telephone service provider in Kenya, who have also spread into the

East African region, have also made a strategic decision to outsource their call centers

and concentrate on the core business (Safaricom Records, 2008). This was a decision

made in order to cope with cut throat competition and it is also an idea that has beenbrought about by the globalized economy. Held et al., (2003) postulates that the growing

extensity and intensity of global interconnectedness implies a speeding up of global

interactions and processes as the development of worldwide systems of transport andcommunication increases the potential velocity of the global diffusion of ideas, goods,

information, capital and people. The growing extensity, intensity and velocity of global

interactions may also be associated with a deepening enmeshment of the local and global[missing word] such that the impact of distant events is magnified while even the most

local developments may come to have enormous global consequences (Held et al., 2003).

In the cases mentioned above, it is evident that the distant events have impacted on

business processes in Kenya.

One of the most striking accelerations of globalization has occurred in respect of

electronic communications (Scholte, 2000). The relevant infrastructure has grown and insome countries transoceanic cables are fully available including the introduction of

satellites and fibre optic cables. These cables have created large supraterritorial spaces forcomputer networks (Scholte, 2000). The improvement of electronic communications has

accelerated the emergence of the call centre concept. The call centre approach has been

necessitated by the need to provide continuous service using few staff that are cheaper tomaintain. Ohmae (1985) notes that having twenty-four hour service is a main

consideration for adopting this approach.

In Kenya the call centre approach has been challenged by the fact that the

countrys internet services is slow and expensive and relies on satellites. However the

country is putting in place a fibre optic undersea cable referred to as East African

Submarine Cable System (EASSy) expected to be operational in 2009 (Ministry ofInformation and Communication, 2008). EASSy is an initiative to connect countries of

Eastern Africa to the rest of the world. It is expected that with the installation of this

cable the prices of internet connectivity will go down drastically and this will makecompanies more efficient. London based business analysis group Datamonitor says that

Africa would see the fastest growth in the number of call centres for the rest of the

decade and singled out Egypt, Botswana, Ghana and Kenya for particularly rapidexpansion. The business analysis group also notes that Kenya, Botswana and Ghana were

all British colonies and have the sort of linguistic skills and education systems that make

them well placed for call centres (www.csmonitor, 2007). Kencall, a major call centrebased in Kenya receives outsourced work from all over the world and employs five

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hundred people (Kencall Records, 2008). There is also Skyweb Evans which is a callcentre employing fifty people. These are among the fifty companies that are receiving

outsourced work from international companies, which shows that globalization has led to

recruitment of a good number of people which is good for the Kenyan economy. Othercompanies will outsource their financial work and human resource work to trusted

companies such as Price Waterhouse Coopers, Ernst and Young amongst others(www.deloitte.com, 2008).

In Kenyas Export Processing Zones (EPZs) located in Athi River and in Ruaraka,

there is a lot of textile work which is finished and sent to the Western countries. EPZs are

defined as fenced industrial estates specializing in manufacturing for exports and offerfree trade conditions and a liberal regulatory environment. Some of these firms have been

outsourced to do final product stitching using cheap labor, and then these finished

products are then sent to the United States and other countries. This thinking comes fromsome of the assumptions of globalization which say that,

customers are ready to forego their preferences provided they are offered a low price

with good quality and that the cost savings arising from mass production will make thefirm more competitive against its rivals. (Ole Gabriel, 2002).

The EPZs have adopted the mass production style and have been able to gain

from the cheap labor provided. Ikiara and Ndungu (1997) note that by 1995, EPZs hadcreated 5000 new jobs since their inception in 1990. EPZs were designed to integrate

Kenya into the global supply chain and attract export-oriented investment in the zones,

thus achieving the economic objectives of job creation, diversification and expansion ofexports, increase productive investments, technology transfer and creation of backward

linkages between the zones and the domestic economy. Manda (2004) notes that EPZsimplement the labor laws with a lot of flexibility. For example the law does not impose a

minimum wage on EPZs. Lax government supervision and opposition to labor

unionization and union activities are common in EPZs. This has led to employee relationsissues with staff in EPZs downing their tools from time to time.

Some banks in Kenya are also receiving work that has been outsourced for back-end processing. A case in point is Barclays receiving work that needs to be processed for

customer accounts abroad and it is processed in Kenya. The confidential information is

encrypted in order to maintain customer confidentiality. Therefore banks are hiring back

end processors in order to meet the demands which must be delivered on time. Thethinking in banks comes from the assumption that the needs of customers are becoming

more homogenous and that all customers will have common needs (Ole Gabriel, 2002).

Again jobs within firms are becoming more temporary and this forces workers to

remain adaptable as changing demand alters occupational knowledge and does away

with stable career paths (Ansberry, 2003a; Skaplinker, 2003). In a number of companiesin Kenya, there is a tendency to use part time workers more rather than having full time

staff. Companies have found this arrangement effective because they pay the part time

workers for only the days or hours worked, which is cheaper than having full timeworkers who are expensive to maintain. Again, with the need to have competitive

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advantage over others, there is a need for organizations to be cost effective and offerproducts which are quality and low priced. Therefore a number of Kenyan firms are

learning to operate leanly in order to achieve this target. This thinking is as a result of

widespread globalization. Therefore we find that part time workers represent a wide andgood percentage of the workforce today in Kenya.

Barring a collapse of the world economy means that the scope of globaloutsourcing can be expected to grow for firms seeking to remain competitive in world

markets and deliver shareholder value (Ansberry, 2003). The impetus towards

outsourcing is to free up resources that will enable firms to focus on their core

specializations. As companies in the developed nations choose to leave all serviceactivities to outside suppliers in less developed countries, they are likely to seek

economies of scale and scope within their own core activities, leading to increased

mergers and consolidation in a number of business sectors (Skaplinker, 2003). The authorcontinues to note that management theory and economic thinking concurs that this is a

desired position for firms and that it contributes to the creative destruction that is the

nature of capitalism itself. Firms that are no longer competitive perform inefficiently andultimately close down, to be replaced by firms that innovate to make better goods and

services. The location of a firm and where its products are made or serviced matters less

and the labor to create the product or perform the service is thus commoditized. In the

US, it has meant the loss of skilled positions and depressed salaries. In Africa andspecifically Kenya it has meant that we have not been able to reap the benefits of

globalization as much, due to the presence of labor with low level skills and the lack of

advanced technology. One of the major challenges in Kenya has been the lack of anInformation, Communication and Technology (ICT) policy which has been a major

hindrance for Kenya to receive outsourced work. The reason is that companies out therewant to be assured confidentiality of their data once it is outsourced and those

confidentiality statements should be backed by a legal policy. The Government of Kenya

has been working on this and has reported that they are completing the policy (Ministryof Information and Communication, 2007). Majority of the work is done in developing

countries through temporary and contract workers. To presume that global outsourcing

will create jobs in poor countries, shrink the gap between the rich and the poor nationsand create smaller, more highly innovative firms with resources and skills in their core

competencies of say marketing and design is being highly optimistic. Global outsourcing

has benefited high technology countries more.

As new products and services are being developed in the US and other developed

countries, they are quickly being outsourced to manufacturers and service providers to do

the actual work. A contract workforce of salespeople and delivery workers will interactwith the consumer. Economic theory suggests that this is the best long term macro

economic interests of developed nations and the world as a whole as it allows for

comparative advantage. However the problem with this is that, in the long term it willlead to structural unemployment in developed nations and create an ever larger skills

gap between those fortunate to have skills and the many who do not.

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Globalization, organizational design and reward management

In terms of organizational design and human resource management, globalization

means that there is need for more responsive and flexible organisations and

employees. Globalization has led to global division of labor. Most organizations nowespecially in the West are making new site selection decisions which are driven by

business needs and opportunity exploitation. Companies from the US have especiallyclosed production plants in the US and created offshore professional and operationscenters and relocated them to where labor is cheap. For example IT industries have

moved to Indias Bangalore City popularly known as the Silicon Valley. The employees

in India are highly skilled yet they demand pay which is a fraction of what a similarly

skilled person in the U.S would demand. In Kenya, as mentioned earlier there arecompanies like Kencall which are being sourced as independent contractors to give

services such as front office customer service via telephone round the world and provide

the customers with relevant information needed. It is more of a customer service orientedservice where a customer is attended to on phone from Kenya, and then their request is

sent to the relevant department for processing. The companies that contract these

independent operators are not from Kenya, but from the West. Many employees in suchventures are paid much less as compared to the US and UK standards (Kaburu, 2007).

However they are comfortable because when they compare themselves to significant

others, they are getting better salaries.

Therefore the global division of labor has resulted in third world countries and

European Union accession states specializing as providers of cheap labor and

commodities, while the developed first world countries of the so called Triad that isUSA, EU and Japan (Rugman, 2000) concentrate on skills that enable the production of

high value-added goods and services of all kinds. In Western countries this has beenreflected in the shift of employment from labor intensive commodity and such production

is outsourced to cheap labor economies, to the service sector such as financial and

business services , retailing and in person services (Reich, 1991).

The service sector comprises three different sorts of work: highly skilled,

professional and knowledge work (for example, Research and Development experts,investment analysis, advertising, IT consultancy amongst others). The other group is the

traditional professions which include, semi skilled workers who comprise of routine back

office work which is heavily reliant on operating IT packages (for example call centre

work, data inputting in financial services). The last category is the semi or low-skilledfront line customer or client facing work (for example, holiday reps, care workers,

hairdressers) which involve a high level of personal skills and emotional labor (Legge,

2005).

Globalization has led to the desirability to maintain flexible and lean

organizations. Puick (1992) notes that leading edge global competitors, irrespective oftheir national origin, share one key organizational design characteristic. Their corporate

structure is simple and flat rather than tall and complex. Simple structures increase the

speed and clarity of communication and allow the concentration of organizational energyand valuable resources on learning rather than controlling, monitoring and reporting.

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Resource based value theorists argue that keeping up with the leader does not

deliver sustained competitive advantage; rather this depends upon the organization

developing its own unique, scarce and inimitable competencies (Barney, 1991;Wernerfelt, 1984). One distinctive capability identified by Kay (1993) is the

architecture of supplier and employee relations, that is developing appropriate relationalforms, be it trust in interpersonal relations (Hosmer, 1995) or involving subcontracting ornetworking organizational forms (which may depend on trust or contract).

Similarly, if an organizations core competencies relate to employee knowhow

that cannot just be brought in but represents job and organizational knowledge that isunique to the organization, then an appropriate competitive and cost effective

organizational form might be supported by a periphery of workers: on nonstandard

contracts and a network of sub-contractors (outsourcing) and contract labor agencies(insourcing) scattered throughout the world. The achievement of competitive advantage

in the global economy is often associated with responsiveness to the sovereign customer

and is equated to speedy delivery of the right product or service at the right quality and atthe right time. Rightness of product or service suggests an understanding of the

customers needs: hence the need to get closer to the customer and removing the slow,

unresponsive long lines of communication of bureaucracy, through business process re-

engineering. This means a move from function-centred to process-oriented organizationalforms and practices. It means integrating previously fragmented tasks so that fewer

people take less time to perform the process in question. In practice this has been

associated with delayering and downsizing. Telkom Kenya was one state corporation thatwas not able to respond to customers needs promptly as evidenced by the number of

complaints in the press. Customer telephone lines would not function for a long time andhence when competitors begun entering the telecommunications industry and provided

reliable communication networks there was a mass exodus by customers. By the time the

corporation realized, many customers had moved and the competitors were too strong.The corporation has now been bought by a French firm and the staff establishment has

been reduced from seventeen thousand to less than four thousand employees (Telkom

Records, 2006). The corporation is reporting profits, however very many people are bitterafter loosing their jobs. The achievement of right quality is often associated with the

introduction of Total Quality Management and again functionally flexible teamworking.

Right time suggests the introduction of just-in-time production of goods and services and

the elimination of waste, which may include unnecessary workers. Many private andpublic sectors in Kenya have gone this way and it is beginning to bear fruit, though it

basically increases poverty when people have no sustainable income to rely on. The other

problem is that those who are retrenched end up opening the traditional small businesseswhich are more or less similar which makes it difficult for them to survive. This is in line

with research conducted by Manda (2004) which indicates that in the informal sector job

security is low as most of these businesses keep closing down.

With globalization there is intensified target setting, surveillance and auditing and

governmentally inspired new initiatives have continued apace. Value for money andcustomer charters have now been augmented by public-private partnerships in the

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pursuit of cost effective service delivery. The Government of Kenya embraced theprocess of performance management in the same spirit and began signing performance

contracts with the ministries and then with the Permanent Secretaries in the ministries in

2003 (The targets are very clear, and the resources required are clearly stipulated,including who is to provide those resources). The contracts are being pushed downwards

to the lower level officers in the government, to enable the achievement of the Ministrysmandate. The service delivery has improved a great deal as a result. In fact thegovernment of Kenya was awarded the United Nations 2007 Public Service Award. The

award is given to the best creative achiever and contributor of public service institutions

in the world. The Kenya public service won the award for the successful way it has

implemented the performance contracting system in public service. It won the categoryone award for improving transparency, accountability and responsiveness in the public

service. The process has worked very well and is moving downwards to the lowest levels

in the public service. A number of ministries have developed customer service chartersand have fixed deadlines for every procedure. This is an initiative that has been driven by

globalization which as stated earlier has emphasized on business process re engineering

in order for firms to remain competitive. Therefore the Government of Kenya isimplementing these systems of managing employees performance in order to enhance

service delivery. The Government has gone ahead to embrace the Rapid Results Initiative

(RRI) which aims to reduce the turn around time for all services. This initiative has meant

there are defined timelines for every process and deviations must be accounted for. Thishas led to strict performance measures and high levels of accountability in all sectors

where, the system has been implemented. It has also meant higher levels of customer

satisfaction. All these initiatives have been driven by international enmeshment wherehappenings elsewhere influence what is happening locally.

Globalization and its contribution to downsizing in Kenya

The spread of economic competition and shareholder activism has motivated large

firms to embrace the lean and mean conception of control and thus implementdownsizings.

A conception of corporate control allows top managers in large firms to control their

environments by specifying how such resources such as personnel should be distributedin order to ensure that directives are executed (Flingstein, 1996).

Macroeconomic factors have facilitated globalization and these include economic

depressions, economic globalization and factors like industry deregulation. The lean andmean conception that drives globalization looks at managing competition using small size

and simple structures to increase performance. It also focuses on restructuring and de-

bureaucratization and emphasizes on returning to core competencies through de-conglomeration and de-diversification (Ibid, 1996). Manda (2004) argues that public

sector downsizing is not directly connected to globalization but the two are not

independent either. Globalization, can be said, to have contributed to downsizing becausethe level of competition is no longer national but global (McCourt and Eldridge (2004).

The global companies coming to compete with local companies have the advantage of

having merged and acquired and therefore have large capital bases and resources whichlocal companies may not have (Ibid, 2004). Again these international companies have

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good governance structures (Holbeche, 2001), a feature that is lacking in most manycorporations in Africa. Wescott, 1999 observes that,

Many African administrations are weakand are plagued with corruption and

other misallocation of resourcesThere is patrimonial recruitment and promotionin order to reward loyalists with jobs.

Puick (1992) postulates that global business strategies point to core competencies,invisible assets and organizational capabilities as key factors influencing long term

success in global markets. Globalization not only brings the Human Resource function

closer to the strategic core of the business, it also changes the scope and content of

human resource management.

Global competition has stimulated domestic deregulation of industries. For

example the telecommunications sector in Kenya has been affected by this move and nowthere are a number of industry players. The assumption was that deregulation would

permit telecommunications and other types of firms to dominate world markets (Budros,

2002). Peters and Waterman (1982) challenged managers to search for excellence byadopting eight attributes, one of them being having a lean staff complement. Hammer and

Champy (1993) exhorted managers to re-engineer the corporation. Re-engineering

involves re-inventing the processes by which firms produce goods and it has focused

attention on reducing firm size and bureaucratization. The new thinking is that managersshould enhance financial performance by preventing their firms from employing too

many people and from operating with overly bureaucratic structures. Its competitive

advantages should include employee empowerment, fluid communication, managementby people rather than numbers, better customer service and agility in the face of shifting

market competitions. These are the key benefits that firms like Kenya Re, Telkom Kenya,Kenya Railways Corporation and the Public sector of Kenya were aiming for when they

carried out their downsizing programs. The lean and mean conception rejects the core

assumptions of its predecessor that bigger is better, continual growth is desirable and thatadaptability is promoted by loose coupling, redundancy and slack resources (Budros,

2000).

A key strategy of the lean and mean firm is downsizing which is the conscious

use permanent personnel reductions in an attempt to improve prospects of survival.

Another strategy adopted by the lean and mean firms is restructuring which includes job

redesign, cutting hierarchical levels and buying and selling divisions.

Bowman and Doughty (1995) have distinguished between involuntary and

voluntary downsizings associated the former with layoffs and the latter with attrition,early retirement and related programs. The Kenyan corporations mentioned began with

early retirement option where enticing packages were offered to lure employees. They

then went ahead to retrench those who were between 50 years and above and they toowere given good packages including pre-retirement counseling in order to help them

cope. The numbers retrenched by Telkom were about thirteen thousand employees. The

numbers retrenched from Kenya Railways Corporation were even higher because thecorporation was being concessioned and the incoming company required a very lean

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staff. In essence companies are taking drastic measures in order to remain lean which isa concept that has come as a result of economic globalization perspective.

The Telkom Kenya retrenchments were driven purely by the fact that thetelecommunications industry had been deregulated and other players such as Safaricom

and Celtel which are mobile phone operating firms had come in. Telkom had remainedrigid and inefficient which is a key hallmark of large bureaucracies in Kenya andtherefore when independent operators began giving efficient services, customers shifted

loyalty. Customers were willing to pay and extra cost for efficient operations. When

firms adopt involuntary downsizing the employee protection is lower and the short term

cost savings for a company are higher. Employees have low control over the continuity oftheir employment when firms execute layoffs, indicating that the protection of employee

well-being is relatively low (Budros, 1999). In contrast voluntary downsizing strategies

offer employees varying levels of economic security, indicating that employeeprotections are relatively high in these cases. The short term cost savings for an

organization are lower because this strategy takes long to complete and is costly in terms

of payments made to existing employees. In involuntary downsizing strategies, theemployees receive no modest severance pay. In the recently concluded retrenchments

done by public corporations the employees were given a lot of protection in the form of

advance warnings and a lot of information and consultations on the process.

Therefore globalization has led to the desire for having lean structures and also

the desire to reduce unnecessary bureaucracies that slow customer service. Every firm is

looking for efficiency. However with downsizing there are major effects on individualsand on the economy itself. These moves could be leading to the ills of globalization on

developing nations which is increasing the level of poverty. These retrenchments had anumber of counter effects not just on the immediate job holder and family but also on

others such as service providers like where they shop.

Globalization and Migration

Migration is defined as, the temporary or permanent movement of persons

between countries to pursue employment or education (or both) or to escape adversepolitical climates (Goldin and Reinert, 2007). These authors note that migration causes

brain drain, which is the loss of educated and highly skilled citizens to other countries. In

Kenya we have lost very many well trained human resources in key positions to

developed countries. They have been lured by better pay and working conditions as wellas the promise of a better life. This skill poaching by the developed countries has had

detrimental effects in the health service sector, as well as in education at the higher

levels. The Ministry of Health in Kenya has complained that they are loosing so many oftheir skilled nurses and doctors to other countries considered as developed and high

income countries. As a result, community health centres in Kenya and Government

hospitals are understaffed thereby compromising the quality of healthcare provided. Inthe public universities the scenario is the same whereby key trained lecturers are moving

to other countries with a lot of ease and many of those who go out for education opt to

remain outside.

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The United Nations Population Division (2005) produced the world migrant stockthat showed the number of migrants had increased from 16,351,076 in 1990 to

17,068,882 in 2005. High income countries use skilled migrants to fill occupational

shortages that cannot be met by training resident nationals. Migrants take with them skillsin critical demand. In Kenya, we have lost a good number of well educated people who

have migrated, which means the loss of leaders, innovators and household heads whichhas its own social and political costs. The social costs include the loss of social cohesion,dynamism and growth potential of the economy. A recent study of the Organisation for

Economic Cooperation and Development (OECD) suggests that emigration of highly

skilled workers may adversely affect small countries by preventing them from reaching a

critical mass of human resources, which would be necessary to foster long-termeconomic development Financial Times, March 23, 2005, citing OECD (2005).

Emigration deprives governments of tax revenues, depleting the quality of public services

and preventing society from earning a return on money invested in the education ofmigrants. In a report entitled Least Developed Countries (LDCs) Report (2007) economic

growth and the creation of employment opportunities for educated manpower in LDCs

appears to be closely associated with slower rates of brain drain. The report indicates thatthe reasons for brain drain are slow economic growth and political instability, especially

in Africa. The low level of pay and the huge and widening gap between earnings in

LDCs and those in developed countries are also to blame.

Brown and Meyer (1999) report that 40,000 scientists and engineers from

developing countries are employed in research and development in high income

countries, compared with 1.5 million who are working in their home countries. About70,000 professionals and university graduates are thought to leave Africa each year to

take up work in Europe or North America (Weiss, 2001). Therefore it is clear fromstatistics that globalization has had its own negative effects on the growth of labor pools

in African countries and this would explain the reasons why they progress so slowly.

CONCLUSION

Globalization has its positive side as well as its negative side. It affects theeconomic dimensions; that is trade, finance, aid, migration and ideas. Increases in these

dimensions of globalization, if managed in a way that supports development in all

countries, can help alleviate global poverty under certain conditions.

However as much as globalization is said to lead to job creation, the jobs created

are not as good as those lost in the formal sectors (Manda, 2004). Again due to high

competition in the informal sector the survival rate of firms is low, making jobs in thesesectors insecure. Also the earnings in the informal sector are lower than the formal sector

making the workers vulnerable to poverty and being less economically empowered. The

Business Daily Africa reported that, EPZs were moving away from Kenya due to whatthey termed competition from China. They have also been accused of paying workers

wages that cannot change their economic status (Sanga, 2008 www.bdafrica.com). This

has led to employees in EPZs going on strike from time to time. Manda (2004) indicates

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that the Kenyan laborer has not excessively improved their economic status as a result ofbeing employed by these firms.

The other issue is that globalization has led to a situation where the businessprocesses that are outsourced are at the lowest level in the hierarchy in terms of skills

requirement.

Most developing countries throughout the world provide basic services such as

data entry. Only a few have been able to improve quality or expertise in order to provide

more complex services. (United Nations Conference on Trade and Development

(UNTCAD) Report 2003). This means that on the positive side, jobs are created but onthe negative side, it means that skill development shall be minimal in developing

countries like Kenya. This is because the tasks are simple, routine, precise and easily

measured and there are no deviations allowed so there is no room for critical thinking.

The other effect of globalization on human resources in Kenya has to do with the

migration patterns. Ratha and Xhu, (2008) indicate that the remittances provided by thepeople who have migrated provide a lifeline to the poor and to their dependants and are

an essential source of foreign exchange and a stabilizing force for the economy in

turbulent times. However for many sub-Saharan African countries, the remittance

figures are also an indicator of the high levels of brain drain that have deprived thesecountries of some of the finest brains (Ratha and Xhu, 2008). This level of brain drain

hampers Africas and specifically Kenyas growth. The fact that the jobs created require

low skills and the skilled people are going away is a bad mix for Kenyas growth, in theyears to come.

The challenge for Kenya as a result of migration is the growth of skilled labor

pools. This is a challenge due to the income differentials between the developed and the

developing countries. The global labor market is increasingly integrated for the high-skilled corporate executives, scientists, entertainers and many others who form the global

professional elite who have high mobility and wages (UNDP Report, 1999). But the

markets for unskilled labor are restricted by national barriers. However, good governanceand improvement of the political and economic environment in Kenya can attract back

some of the good brains who have been attracted by the high payment levels in developed

countries.

One of the positive measures of globalization has been the passing on of

information which has to do with flow of ideas. This has led to improvements in the way

things are done. An example is the public service mentioned where the new ideas havebeen embraced thus improving service delivery. Globalization allows others to get to

know the best practices of other countries easily as a result of information flows which

have been aided by technology.

Again globalization has led to cut throat competition which means that

organizations have had to manage their performance very strictly in order to survive. It isfrom this backdrop that organizations in Kenya including the civil service have embarked

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on measures of improving performance. From the human resource managementperspective, the performance targets should be clearly measurable so that individuals can

gauge their performance. The targets come from the organizational targets. This form of

management thinking has led to improvement in organizational performance andespecially service delivery has improved extensively especially in the public service.

Most of these organizations are competing with global organizations so they have had toput in extra effort to survive. So with globalization organizations can no longer remaincomplacent.

According to a United Nations Development Programme (UNDP) Report (1999),

global markets, global technology, global ideas and global solidarity can enrich the livesof people everywhere, greatly expanding their choices. However, globalization today is

being driven by market expansion, opening national borders to trade, capital, information

which is in turn outpacing governance of these markets. The report indicates that whenthe market goes too far in dominating social, political and economic outcomes, the

opportunities and rewards of globalization spread unequally and inequitably

concentrating power and wealth in a select group of people.

The way forward is not to stop the expansion of global markets but to find rules

and institutions for stronger governance. This means having globalization with ethics and

less disparity within and between nations and not more. The idea is to have lessmarginalization of countries, less poverty and deprivation.

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